Tax Questions Your Clients May Ask in 2021

8 tax questions your client may ask you

After your client’s return has been e-filed, they may have some questions. For example, they may want to know how long they have to wait for their refund, or how to avoid a surprise at tax time next year. They will probably want to know how long they have to wait for their refund, where their return goes after you submit it, how they can improve their taxes for next year, and more. We help you get your clients the best answers to these frequently asked questions in this article. 

How early can I help my client file their taxes? 

After your client’s return has been e-filed, they may have some questions. They will probably want to know how long they must wait for their refund, where their return goes after you submit it, how they can improve their taxes for next year, and more. We help you get your clients the best answers to these frequently asked questions in this article. 

When can I begin my client’s return? 

You can begin entering tax information into your client file as soon as they have all their tax forms. You can submit your client’s return as early as the beginning of January. TaxSlayer Pro sends you an email as soon as we are accepting returns each year, so you know the earliest date you can submit their information. The IRS opens in mid to late January each year. Once they are accepting e-files, you can transmit your client’s return electronically for processing. 

When will my clients receive their tax forms? 

All your client’s income forms, including W-2s and 1099s, must be postmarked on or before January 31st. Your client should have all their forms in hand by early February. If your client thinks they are missing forms, you can assist them by giving them the following tips. 

  • Reach out to their employer – Their employer may have forgotten to send their tax forms. Or they may be able to provide an additional copy. 
  • Verify their address – If your client recently moved, they may not have updated their address in all the necessary places, so their tax forms might have been sent to their old address. 
  • Check their email or other online document portals – Not all employers send tax forms through the mail. Encourage your client to check their email or document portal if they are missing forms. 
  • Contact the IRS – If none of the other tips work, your client can directly contact the IRS to try to locate their forms. 

What happens after I submit my client’s return? 

When you file your client’s tax return using TaxSlayer Pro, we time stamp their return and electronically send it to the IRS. Then the IRS will review it. If everything looks correct and your client did not claim any credits related to the PATH Act, the IRS will approve it and begin to process their refund if they are due one. 

How long will it take my client to receive their refund? 

Most of your clients will receive their refund in 21 days, according to the IRS. However, certain credits and deductions that are part of the PATH Act can delay this timeline. Also, your clients might experience a delay if they choose to partner with the bank you have chosen. 

How do I help my client track a missing refund? 

You can help your client use the IRS Where’s My Refund tool if they are missing their refund. This will show if your client’s return was received, approved, or if their refund was sent. 

Will my client owe taxes on their Economic Impact Payment (EIP)? 

No, your client won’t owe taxes on their EIP because it is not considered taxable income. Their payment also won’t affect their refund or their tax bracket.  

If your client had a baby, adopted a child, or did not receive their full EIP in 2020, you will be able to help them claim the rest of their payment on their tax return. 

For more information about the CARES Act, read also How Will the CARES Act Affect My Clients’ 2020 Taxes?

Will my client’s EIP affect their other federal benefits? 

No, your client’s EIP will not affect their other benefits, like Social Security and unemployment benefits. Your client should have still received an EIP even if they received these benefits during the tax year if they fell below the income threshold.  

Are my client’s unemployment benefits taxable? 

Yes, your client’s unemployment benefits are taxable, even if they received them due to COVID-19. Both federal and state taxes are applicable. If your client makes more than the minimum amount required to file, unemployment income included, they will be required to pay taxes on all their eligible income. 

What happens after I submit my client’s amended return? 

After you use TaxSlayer Pro to prepare your client’s Form 1040X, you will need to print and mail in their amended return. The IRS usually takes between 8 and 12 weeks to review an amended return. You can help your client use the IRS Where’s My Amended Return tool to see where their amendment is in the review process. 

Is it faster for my client to file with me or to mail in their return? 

The IRS recommends e-filing and choosing direct deposit for the fastest refund. You can assure your clients that filing with you is faster than mailing in their return. Encourage them to choose direct deposit. If your client can’t wait for their refund, they may be eligible for a Refund Advance

How much should my clients withhold from their paychecks? 

Each taxpayer’s situation is unique. If a client’s refund is very large, or if they unexpectedly have a large balance due, or if you know they have a big life change coming, such as marriage or a new child in the home, ask them if they have considered revising their Form W-4, a form that changed in the tax year 2020. As their tax preparer, you are uniquely positioned to assist them with this form to help them avoid a surprise next year. 

You can also direct them to the IRS Tax Withholding Estimator. This tool will allow your client to see how much the IRS recommends they withhold from each paycheck.